Company Server Setup

Company Goales & Market Share

Trey: So the first thing I would ask anyone who is looking to start a web hosting business would be; what is the goal of starting this company? Are you a web developer who wants to make some extra money and retain your clients by offering them hosting with your web design service? Are you looking to have thousands of clients and have this be your sole source of income, or something in between. Knowing the answer to this question will help you study the next important question: Is there a share of the market you believe you can acquire?

Knowing if there is market share and how you will develop customers is vital to how you grow your web hosting business. You may already have many potential clients lined up, say for instance if you are a web developer, and the clients you've built sites for come to you for updates. You bill them for the updates, why not bundle that service with web hosting that you provide, make more money from your existing clients and keep the business closer to you. This would be my example of a smaller hosting company.

Kaumil: And for smaller hosting company goals our reseller hosting is a great option. It's easy to use and easy to setup and if you need help migrating hosting clients over we can help you do so for free. You will get access to web host manager (WHM) which is a very popular control panel where you'll be able to create and manage your clients web hosting accounts. Your web hosting clients will have their own cPanel control panel, which is the most widely used and most stable control panel in the hosting industry.

You'll be able to set packages and limit features and sell your own unique web hosting packages. The best thing about our reseller hosting is that you do not have to worry about the technical stuff such as how to setup and manage a server, or dealing with system administrative responsibilities. GreenGeeks takes care of that for you. You will get 50GB of disk space and 500GB of transfer to use to offer your clients and grow from there with our scalable, easy to upgrade reseller hosting plans.

Trey: Now if you're not a web developer and say you want to own a particular part of the market, what part of the market will you go after? After all, there are many types of ways to go to market to acquire new customers. So, let's take customers that use WordPress as a type of market to go after and let's take a geographic location like Dayton OH. (for the sake of argument Dayton is where you live and work and you are also a WordPress aficionado).

Say you know a lot about WordPress and you want to build a web hosting company catered just to those customers. You'll be competing with a ton of competitors, including GreenGeeks as we offer WordPress as one of our scripts, as well as many hosting companies which are solely geared toward WordPress sites. You are going to run into some headwinds in terms of growth due to competition. Going after strictly WordPress sites is not an impossible goal for gaining success but you'll need to be strategic in how you go after these clients.

Now say you want to build a web hosting service that offers all the main features as other shared web hosting companies, not just WordPress, and you want to keep your focus on Dayton because you know the local market and you believe you can drive local businesses to your service. The population of Dayton is around 140, 000 people and if we say conservatively 5% of businesses and individuals have websites there are 7, 000 potential customers. You may have local competition and you most certainly will have global competitors but you could carve out a good piece of the market for yourself by promoting your hosting company in the local market.

Now, let's think outside the box, you live in Dayton but you're also a WordPress expert and you think you can offer exceptional WordPress Hosting to people and businesses in Dayton. WordPress is a widely used content management system, so we'll say 20% of customers need WordPress hosting and in Dayton that means there are potentially 1, 400 customers. You've reduced the potential customer base from 7, 000 to 1, 400, BUT, if you are the expert in the area you could grab a larger percentage of the 1, 400 customers than you would of the 7, 000 all around web hosting customers.

By focusing on not just the WordPress or Dayton market, but by combining the two you have a higher potential to acquire customers from an albeit smaller but more focused market share. This allows you to concentrate on the features which your potential customers will be looking for and it allows you to focus your marketing budget towards acquiring those customers saving you money and increasing your ROI.

If you acquire say half of the 1, 400 WordPress customers in Dayton you'll have 700 clients which if you bill them at $10 a month, you'll have $7, 000 a month coming in. To make more money you can have a higher monthly cost (I've seen $30+/mo in some cases) or you can expand. Let's say the WordPress + Dayton offer worked, what about WordPress + Ohio. You are still local because you are in Dayton but with Ohio's 11 million plus residents and using the same metrics of 5% have websites and 20% of those use and need WordPress hosting then you could have upwards of 110, 000 potential clients.

Quick Note: The web hosting business is seasonal. After you read the rest of this page I would encourage you to go to my KB article on how the seasons affect new customer acquisition in the web hosting marketplace.

Learning about the market you want to go after is essential, but you dont have to know from head to toe every marketing niche you want to go after from the start. I have found success and hard work breeds potential including things you had never thought of before. When I started GreenGeeks we offered shared and reseller hosting. We found out early that some clients outgrew their CPU usage, their sites were just too strong to be hosted with other shared clients because they ate up the resources that all our shared clients use. We needed a higher level plan to accommodate these stronger websites and decided upon VPS hosting services.

I was nervous about VPS hosting services because I had marketed for a couple companies who didn't know what they were doing with VPS. Kaumil convinced me that not only could we do it properly but also that there was a strong market for those services and it would allow our customers with high usage sites to stay with us. We started offering it, worked through the kinks everyone experiences at the start of a new venture/offering and today it is one of our strongest service lines.

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